Here's why Covid-19 will hit rents, not house prices

Covid-19 adds further pressure to some cities already struggling with squeezed rental property markets, as the number of vulnerable people unable to afford housing also rises.

Bayleys’ property manager Kellie Hodson said while that surprised agents, it was an indication of what was happening in the market.

“There’s a lot of demand out there at the moment. There’s a lot of Kiwi families returning home due to Covid.

“I think they’ve had a bit of a scare with Covid and they just feel safer returning home and living in New Zealand.”

Hodson said not all of them could find homes, however.

“No, that is a problem. There isn’t enough houses to house everybody, so there is quite a shortage.”

Hodson only had about half a dozen listings and on average she expected to have 20 to 30 applications to view each of them.

“Covid hasn’t really improved the situation. I mean, before lockdown we did have a major issue with so many people in emergency housing and a couple sleeping in cars and things too, but you can’t house everyone, eh? You do your best.”

Hodson said some of those returning to Aotearoa wanted to move back into their properties, putting pressure on tenants to eventually move out.

Brian Eriksen said two of the Community Housing Actiontrust’s temporary stay houses – usually used for about six weeks while a family transitioned into private or state accommodation – were now being used for months.

“We’ve got people who’ve been in there for a long time. There’s just nowhere for them to go.

“We’ve got people wanting accommodation, and they’ve got their families split up.

“We’ve got people sleeping in sheds or doubling up in their mum’s place, in a little unit, with their family because they just can’t find affordable housing.”

Melissa Robinson is the boss of a Ray White property management group.

She said locals seemed to be staying put.

“We’ve actually noticed there’s quite an increase in applications we are receiving on properties and the supply doesn’t seem to be as high.

“That seems to have slowed down. People don’t seem to be moving as much.”

Robinson said there was a lot of out of town demand.

“We haven’t really had too much of the ‘hey, I’ve been made redundant’ yet. That hasn’t really affected us.”

Robinson said she only had about four listings, for which she expected at least 15 applications to view each.

John Coffey, who manages transitional housing for the Salvation Army, said viewing homes was a challenging experience for his clients.

“It’s not uncommon to go and have 40 people viewing on a day. It is making it difficult, I have to say that.

“The six families that we currently have in our housing units have been there on average 14 weeks, so it is extending that time out a little bit, but we are still managing to place them.”

Coffey said the real issue was the dire shortage of long-term social housing.

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